Tuesday, September 2, 2008

It's all about politics this year. More to the point, its all about Republicans and Democrats. This is the season of the candidates, the issues, and the Parties. We hear everything about illegal immigration, the economy, and the war. The two political parties and their nominees for public offices everywhere are consumed with new and old answers to such social and economic issues as universal health care, housing, and interest rates. This is business as usual in an election year.

However, if you listen to all of the speeches, read all of the political flyers, hear all of the endorsements, you will still hear nary a word about common interest developments, homes for millions of Americans. "Who cares?" you say, "Elections are about important national and state issues, not about something as mundane as my homeowners association." That's probably true at the national level where the debate about our country's future rages over problems that are often close to insoluble. But what about at the state and local levels? What about the candidates for city council, the state legislature, or governor?

At the state level, housing and real estate law and land use should carry a great deal of weight with politicians, and common interest developments are all about those issues. Where should we build new ones? How do we make them green? How do we govern those that already exist? How do we make them affordable? What do we do with the projects that have reached the end of their useful lives? These are issues which can and will have an enormous impact on any state's housing stock, its economy, and its future.

Yet we hear almost nothing about this huge constituency from any politician. "Is it that big a deal?" you ask. Well how about this: as of this year there are over 300,000 association-governed communities in the United States and they are home to almost sixty million residents! That's somewhere around 20% of the entire population of this country living in common interest developments. Yes, it's a big deal.

So what do all of these real estate interests need from our elected officials? Well first of all, they need understanding. An understanding of the importance of this type of housing to the entire nation. An understanding of the unique nature of its governance. An understanding of the potential economic disasters which will occur if these communities can no longer self-govern or maintain their facilities. After that, we need carefully drafted legislation that recognizes these concerns and looks to the long term survival of this type of housing.

For example, current law in most states does not provide meaningful support or even a legal context for the community that can no longer raise the funds necessary to maintain the project, can no longer recruit volunteers to serve on boards of directors, or has reached the end of its useful life. In most states there is no statutory recognition of this problem whatsoever. In California there is an ongoing attempt to revise the existing statutory framework governing common interest developments, but a viable end strategy for failed communities has not yet found its way into the proposed revisions.

It is apparent that many political candidates are largely unaware of important community association issues. Even less interest is shown by the major political parties. Maybe that's because what makes good community association government does not lend itself to a Republican or Democratic platform. Is that because the preservation and support of common interest communities has no political ring to it?

That’s not true, of course. Community associations resound with debates over less government vs. more government, similar to the rhetoric among political parties. Should boards more aggressively enforce the CCRs or should they adopt a "hands off" point of view? Should an individual's freedom to build what she wants, to choose the color he wants, or to park whatever vehicles on their lot that they want, be curtailed by written rules? Should the board be able to adopt a prudent economic policy by raising assessments as necessary to assure sufficient funds for future maintenance, or should they have to accept the political reality that the owners do not want to pay higher taxes? Are there constitutional questions here? Individual rights vs. the needs of the community?

These issues emulate the national political debate. At the local level, however, they are largely non-partisan. Also, the issues outlined above are probably too narrow to be of consequence, or even of interest, to a political party. But nevertheless, they should be the focus of state regulators, and politicians owe it to condo and planned development owners everywhere to focus their radar on the potential consequences of failed budgets or failed community association government. These issues involve such a sizable chunk of the population that politicians at the state level, where real property law and policy is decided, must be aware of these issues so at least they will be prepared to evaluate any proposed legislative changes to the law governing associations.

It's time for community association issues to receive more political attention. The foreclosure crisis that we have seen over the past two years could be equaled by the crisis that would befall the nation if common interest communities begin to fail in large numbers. The resolution of that crisis, however, will take political guts at all levels, starting with boards of directors and including our elected officials.

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About Me

I received my Ph.D. in Government from Claremont Graduate School and my law degree from the University of California, Davis. Berding|Weil has represented community associations for over 35 years. For more information, please call 925-838-2090, or email: tberding@berding-weil.com